CATALYZE Helps One Early Childhood Education Center Meet Growth Objectives through Tailored Loan Products
Under USAID’s global CATALYZE mechanism, implemented by Palladium, EduFinance uses a blended finance approach to test models that improve and sustain learning outcomes for children and youth globally, particularly those most vulnerable. CATALYZE EduFinance partners with Kaizenvest — an emerging markets asset manager focused on the future of learning and work — to expand and improve early childhood development (ECD) centers serving low- to middle- income families in South Africa.
Access to early childhood care and education is a critical basis for acquiring foundational skills, including literacy, numeracy, and socio-emotional learning. Participation in ECD boosts children’s school readiness and reduces gaps in accessibility and quality of education, a prevalent issue in South Africa, where access to education is plagued by stark race and wealth inequalities. ECD, specifically, is a key focus area for CATALYZE EduFinance South Africa.
In South Africa, affordable ECD providers struggle to find adequate financing options to expand their facilities. CATALYZE partners with local financial institutions to provide affordable financing and capacity building support for low-cost education providers to enhance their education offerings, as well as improve learning outcomes for students. In addition, the activity provides the opportunity for early childhood centers to participate in an outcomes-based lending program, Rewards & Recognition (R&R). The R&R program measures ECD outcomes at baseline and endline and offers financial rewards and public recognition for schools that show measurable improvements.
Under EduFinance South Africa, CATALYZE works with Seed Fund Connect (formerly Township Fleva), a social enterprise committed to fostering economic growth and entrepreneurship within township communities by focusing on enterprise development. Working with EduFinance, Seed Fund Connect and Kaizenvest have jointly developed a variety of loan products to specifically cater to the needs of ECDs and raised $1.75 million in private capital to be used to fund these loans.
Challenges Before Transformation
In the heart of Diepsloot, Johannesburg, the Mother Goose Early Childhood Development Centre is a place for growth and aspiration. Owned and managed by Minah Senoamadi, a determined entrepreneur, Mother Goose has evolved from humble beginnings into a thriving institution. With the support of a crucial loan from Seed Find Connect, the center underwent remarkable improvements, enabling it to deliver high-quality care and education to local children, while meeting vital regulatory standards.
Prior to Seed Find Connect’s intervention through CATALYZE, Mother Goose ECD faced numerous obstacles that constrained its potential and, in some instances, threatened its existence. The center grappled with classroom overcrowding, inadequate sanitation facilities, and a kitchen that failed to meet health standards. Additionally, Senoamadi and her family were living on the premises, reducing the available space for learning and limiting the number of children who could be enrolled. Though Senoamadi had an approved building plan from the city, it remained unexecuted due to financial constraints, placing further limits on the center’s ability to meet Department of Education standards.
These challenges were particularly difficult in a setting like Diepsloot, where access to quality early childhood education is often inaccessible. Addressing these issues was critical for Mother Goose to continue operating and, most importantly, to deliver on its mission of nurturing young minds in a safe, supportive environment.
The Impact of Seed Find Connect’s Loan through CATALYZE Support
Through support under CATALYZE EduFinance, Seed Find Connect’s loan provided a lifeline for Mother Goose ECD, allowing Senoamadi to tackle each challenge with targeted interventions:
1. Classroom Expansion: With the loan, Senoamadi expanded the center by adding a 60m² classroom on the first floor, immediately alleviating an acute overcrowding issue. This expansion enabled Mother Goose to comply with Department of Education regulations regarding classroom size and capacity, while creating a safer, more conducive learning environment.
2. Enhanced Sanitation Facilities: Recognizing the need for better hygiene, especially with young learners, Mother Goose added eight additional toilets. This expansion not only improved the sanitation standards but also better served the growing number of students, ensuring a more comfortable and safer environment.
3. Kitchen Renovations: With funds from the loan, the center’s kitchen was upgraded to meet health and safety standards. This transformation ensured that the meals prepared for children were done in a clean, regulated environment, improving the overall wellbeing of the children who relied on nutritious meals at school.
4. Separate Residential Space: A significant part of the intervention included helping Senoamadi and her family relocate, making the entire center solely dedicated to educational purposes. This shift allowed Mother Goose to maximize its available space and increase the number of students.
5. Implementation of Approved Building Plans: Finally, Seed Find Connect’s support enabled the first phase of the approved building plans to be executed. This meant the center’s physical structure now is aligned with regulatory standards, ensuring it can operate sustainably and safely long into the future.
Milestones and Achievements
We are excited that our children and our parents are so happy to have a big and beautiful school…Now our school is growing every day because of the support!
— Minah Senwamadi , Owner of Mother Goose ECD center
The improvements facilitated by Seed Find Connect’s loan extended beyond physical infrastructure, reaching the core of Mother Goose’s mission. The center secured formal approval from the Department of Education, qualifying it for an ECD subsidy or grant. This financial support is a milestone, providing essential funding for teacher salaries, nutrition programs, and operational costs. These resources are vital in sustaining the center’s growth, enabling it to continue its impact in Diepsloot.
About CATALYZE EduFinance
CATALYZE EduFinance (September 2019–2027) uses a blended finance approach to test models that improve and sustain learning outcomes for children and youth globally, particularly those most vulnerable. CATALYZE pilots multiple models in 11 countries across Latin America, the Caribbean, and Sub-Saharan Africa, supporting local education stakeholders in state and non-state education in early childhood development; primary and secondary education; technical and vocational education; and improving enabling environments. Pilot activities implemented by EduFinance are complemented by a global community of practice, the Education Finance Network.
